Industry Sector Weekly by Lloyds TSB

Last week’s release of September IFO survey results indicated stronger than expected business confidence in Germany. IFO survey points to moderating German growth

Last week’s release of September IFO survey results indicated stronger than expected business confidence in Germany. The survey rose to 106.8 in September from 106.7 in August, while the consensus expected a fall to 106.4. However, underlying strength in September’s IFO related more to optimism in current conditions rather than expectations over the next six months, continuing a trend begun in July of this year. Weakness in future relative to current conditions, reconfirms results from other surveys such as the PMI and the ZEW, suggesting a moderation in the annual pace of industry growth in the first half of next year. Furthermore, detailed sector data from the IFO disclosed this week show continued deterioration in the outlook for construction, while prospects for the retail sector remain optimistic.

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